Want a car deal? Buy whatever your neighbor drives

How consumers can use regional preferences to their advantage

Whether it’s due to patriotism or pragmatism, the shopping habits of American drivers vary wildly depending on their zip code. Midwesterners overwhelmingly go for American makes like Buick and Chrysler, while New Englanders prefer Subaru and Volvo, a new survey finds—information experts say savvy car buyers can use to score a good deal.

People living in the Midwest are 64% more likely to search for a Chrysler than car-buyers in other regions and 53% more likely to shop for a Buick, according to an analysis of online shopping behavior of 10 million consumers tracked by auto-pricing publisher Kelley Blue Book. Car buyers on the west coast are also 85% more likely to search for a U.S.-made electric-powered Tesla than consumers in any other region and are 68% more likely to search for Scion, which first went on sale in California and is marketed to younger consumers. In the Northeast, consumers are 56% more likely to search for a Subaru, and 45% more likely to shop for a Volvo.

Regions where certain brands are popular will naturally be targeted by the manufacturers of those cars—and by their competition. Case in point: The Chrysler 200 sells for 1.5% less in Detroit, Mich. than Los Angeles, Calif., according to transaction prices tracked by Edmunds.com. “If there’s a lot of inventory and competition in that segment heavy incentives will be pushed for those cars,” says Richard Arca, senior manager of pricing for price-comparison website Edmunds.com. A Mercedes-Benz C-Class—popular in Los Angeles—is 2% cheaper there than in Kentucky, based on the Edmunds.com data.

Dealers in areas where certain brands do bumper business often get stuck with unwanted inventory, which can lead to bigger cash incentives. “Ideally, car dealers manage supply and demand,” says Karl Brauer, senior analyst at KBB. “In reality, it’s not uncommon for dealers to end up with too many of one vehicle and want to sell them off.” Of course, it’s not always as simple as that. “Honda and Toyota have a stranglehold on Southern California,” Arca says. And drivers in southern states appear to be the least influenced by brand when shopping for a light vehicle. Only 17% show a preference for Infiniti and Ram over other brands, so manufacturers of other cars will battle for market dominance in that region, Brauer says.

Bloomberg

A Tesla Motors S sedan

Why are cars popular in one region instead of another? Americans choose brands that reflect characteristics of certain U.S. regions—like where those cars are made. “Given the importance of the automobile industry in the Midwest, shoppers there prefer Americans brands that are produced in their own backyard,” Brauer says. People living on the west coast in states like California prefer customizable brands like Scion and the fashionable electric-powered Tesla, he says, but those same brands are shunned in parts of the Northeast, where all-wheel drives are more popular, and in the “truck belt” in the South, where Ram Trucks are popular.

Of course, practical considerations drive car-buyer choice too. According to KBB, Westerners are 66% more likely to consider a hybrid car, Midwesterners are 42% more likely to consider a full-size cross-over, Southerners are 41% more likely to consider a full-size sport utility, while those in the Northeast are 20% more likely to shop for a compact crossover. On a state-by-state level, the KBB survey indicates that car buyers make choices based on income. In Maryland—America’s richest state, based on the U.S. Census household income—were more likely to search for Acura, Mercedes-Benz and BMW. Car buyers in Mississippi—America’s poorest state—were more likely to shop for Nissan, GMC and Infiniti.

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